World Economy

Cuba Faces Grim Prospects

Cuba is facing major difficulties due to liquidity problems and oil shortages.Cuba is facing major difficulties due to liquidity problems and oil shortages.

Cuba’s economic difficulties will be aggravated by the uncertainty regarding how US President-elect Donald Trump will deal with the thaw inherited from President Barack Obama.

Experts preferred not to speculate. But they did recommend that the Cuban authorities adopt all measures within their reach to cushion the blow and reinforce what has been achieved on the economic front with the outgoing US administration, IPSnews reported.

 “In any case, Cuba will have to continue moving forward with its economic reforms and try to resolve whatever has clearly not functioned for decades and is within our reach to fix,” said Cuban economist Pavel Vidal, a professor at the Javeriana University in Cali, Colombia.

Vidal is studying the economic reforms implemented since 2008 by the government of Raul Castro, which has been facing major difficulties this year due to liquidity problems and oil shortages caused by the political and economic crisis in Venezuela, the country’s main trading partner and energy supplier.

In the first six months of this year, GDP grew just 1%, half of what was expected. And forecasts for the rest of 2016 are bleak, projecting a drop of 1%.

Further muddying the picture are the doubts with respect to the recently restored relations with the United States, now that Democratic candidate Hillary Clinton has been defeated by her Republican rival in the Nov. 8 elections.

 Hard to Know

“With regard to Cuba, I don’t think Trump will roll back the important steps taken by the Obama administration to normalize relations between the two countries,” John Gronbeck-Tedesco, assistant professor of American Studies at Ramapo College in New Jersey, told IPS by email.

“But with a Republican-controlled Congress, it’s harder to know when the United States will fully commit to lifting the embargo and truly open up trade between the two countries,” said the academic, the author of the book “Cuba, the United States, and Cultures of the Transnational Left, 1930-1975”.

The US embargo against Cuba, in place since 1962, consists of a complex web of laws that can only be fully repealed by Congress.

Cuba sees the embargo as the biggest obstacle it faces to development and a normalization of ties with its giant neighbor to the north.


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